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Approval for direct wire transfers to casinos one key to luring international gamblers

March 1st, 2011 · 23 Comments

The longer the debate about a casino expansion goes on, the more we learn.

What I learned today was something about how gamblers with lots of money get their money to casinos. Until a year ago, they could only bring cash — a problem if you’re coming across the border, where the limit is $10,000.

For the last year and a bit, the B.C. Lottery Corporation has run a pilot program that was described to me this way in an email from the Solicitor General’s ministry, which regulates gaming.

“In December 2009, a pilot project of Patron Gaming Fund accounts began with casinos in the Lower Mainland. These accounts enable a patron to deposit funds, withdraw them at a gaming facility for play, then re-deposit funds, either for further play later or return to their source account.

The accounts are for patrons who typically gamble at VIP table games frequently, providing them with a higher level of security in handling large sums of money. For these accounts, electronic funds transfers can only go to and from chartered Canadian banks.

Now the lottery corporation wants to go one step further, by allowing direct wire transfers into casinos from select banks. I’m told that’s important to the Paragon plan to generate $100 million in business from international gamblers as part of its overall projections for the expanded Vancouver casino. Even the current system, under the pilot project, is considered cumbersome for people who play at casinos around the world.

Of course, that raises the spectre of money laundering for some. Though, as others point out in my story in tomorrow’s paper, everything to do with money in any form contains a potential for money-laundering.

The trick, I suspect, with the proposed new idea of direct money transfers will be to be very, very careful about which overseas banks will be allowed to be on the list of those who clients can wire money.

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  • The Fourth Horseman

    Would love to comment but when I click I get taken to a 404 page…

  • Morry

    that is the plan. You are out of funds.

  • S Garossino

    The same people who declare that it is not at all suspicious for someone to arrive at the Starlight with a million bucks in casino chips packed in a suitcase are the perfect people to guard the integrity of the BC gambling industry.

  • Morven

    If it such a good idea, then the least that BCLC and the Solicitor General can do is to show us how the process will be compatible with existing international money laundering regulations.

    How do they manage the risks?

    The unveiling of the new proposal by BCLC is on par (no pun intended) with the transparency of the unveiling of the HST.
    -30-

  • Dan Cooper

    “coming across the border…the limit is $10,000.”

    The official word is that there is absolutely no rule against bringing more than $10,000 across the border, as long as you report it…and of course as long as it isn’t being laundered or used for crime!

    http://www.cbsa-asfc.gc.ca/publications/pub/bsf5052-eng.html

    I’ve also just wandered through a number of travel advisory websites on the topic, and find nothing that suggests that the border guards are, contrary to what the CBSA website says, not letting cash across.

  • jesse

    Laundered money, in my view, is simply money that is not reported as income for tax purposes, and extends to both illegal and legal goods/services. I think the line is reasonably clear.

  • Morven

    The proposal turns casinos from entertainment centres that handle cash into financial centres that provide some entertainment.

    All the more reason to regulate them as financial centres for once and for all, and turn over the financial regulation aspects to organzations such the FIC and/or the securities commission, who, despite some negative publicity, do have experience in regulatory oversight and assessing red flags.

    Further, why should casinos have an easier regulatory path than banks. trust companies, lawyers in handling overseas and Canadian cash transfers.

    After all, our provincial government is committed to open, transparent and accountable governance.

    Is it or is it not?
    -30-

  • Bill Lee

    So every flight from Macau, Hong Kong etc. will have several hundred worried men and women with little cases in their hand or stowed luggage with large bills and practised stories as they land at YVR to go to the ‘other’ casino.
    They certainly won’t go downtown.

    Picture story in today’s Globe also related
    http://www.theglobeandmail.com/news/world/kleptocrats-the-dictators-guide-to-amassing-wealth/article1926083/

    with infographic in left column

    http://www.theglobeandmail.com/news/world/the-top-five-kleptocrats-and-what-they-stole/article1926084/?from=1926083

  • The Fourth Horseman

    @Morven…spot on!

    ‘Further, why should casinos have an easier regulatory path than banks. trust companies, lawyers in handling overseas and Canadian cash transfers’.

    The transfer of money by wire is a huge part of the money laundering chain. Imagine, hundreds or thousands coming in to a casino near year.

    How would they wade through all of them, in a timely manner? The pressure to release funds before proper documentaion and due diligence can be untertaken is enourmous, and especially so on front line casino workers.

    This is shameful!

  • Max

    @ jesse #6

    I smiled as I read your post. Over on CityCaucus.com, is yet another article from Vivian Krause on American dollars ( Greenest City: US Ca$h) flowing into BC for various purposes, including influencing government, and under the guise of ‘charitable donations’.

    I think one of the best response posts I have seen to-date is the following: (posted by C. Litz)

    For Lease:

    Canadian City Hall. Good views, good location, lots of walk-by traffic. All facilities as new. Includes custom office, rooftop garden and honey bees. Vendor motivated and looking to expand business into related sectors of government.

    Turnkey operation – no training required. Green marketing strategy in place. Staff motivated to please.

    If you want to turn your ideas into actions, and are frustrated in your efforts to buy or lease a civic government in other countries, why not try the most livable city in the world!

    Submit your offers to:
    City of Vancouver
    c/o Tides Canada
    Seattle, Washington

    Canadian currency not accepted

  • Morven

    The casino backers are proud to trumpet the benefits of casino tourism (to justify the project)

    What they failed to mention is that casino regulators world wide are often concerned with casino based tourism- the so-called junkets – where frequently third parties arrange gaming tours, arrange the transfer of money and, if the literature is correct, heighten the risks of masking money sources.

    As I understand the matter, the USA has a strong regulatory policy on controlling casino junkets but few other jurisdictions have these controls.

    Perhaps the casino boosters can explain how they intend to regulate casino tourism.
    -30

  • Bill Lee

    Skimming the Seattle Times for city hall scandals and new coal ports in Bellingham etc. I find this
    “In a first for Indian casinos, revenue has fallen”
    http://seattletimes.nwsource.com/text/2014375118.html

    …”down 1 percent from 2008″
    and “Revenue from food and beverages, lodging, entertainment and shopping declined 4 percent to $3.2 billion in 2009 in the more than 200 Indian tribes that operated nearly 450 casinos in 28 states.”
    ….”Commercial casino gambling revenue declined even more, falling 8 percent…”

    See the Alan Meister Indian Gaming Report at
    http://www.nathaninc.com/resources/indian-gaming-industry-report-2009-2010, and the news all over the place with press release reporting and the AP adding anecdotal stories.

  • Bill McCreery

    1) Don’t tourists come here to experience British Columbia for what it is and we are? These jackpot tourists will see the inside of the casino and possibly a body rub parlour, then back on the plane. Are those the kind of tourists we want?

    And the profits will be on the next plane south.

    2) An alternate scenario might be that Paragon, gosh darn, who would have thought, was too optimistic and the casino goes into bankruptcy or otherwise does not meet it’s financial commitments to the City and Province. Is this supposedly squeaky clean ‘deal’ set up so that if either happens (ie: a minimum of $17M per year to the City, etc.), Paragon folds its tent and the buildings are returned to Pavco.

    What then? Well a 100,000 sf floor plate and a couple of hotels will make a nice start at turning BC Place into a convention, trade show facility, something I suggested a few years back in a proposal published in the Sun.

    But, this train of thought does raise the question of how squeaky tight is this deal for taxpayers? So far all we’re hearing from Mr. Podmore and clan is ‘trust us, we know more than the uniformed critics’. That is not good enough. Why isn’t the Vision City Council requiring that this kind of information and assurances be made public?

    Unless the proponents can come back and conclusively answer these questions, we can only conclude that there are none. Therefore, the taxpayer is indeed on the hook. I look forward to seeing convincing information.

    3) On another tack, rather than just claim, ‘trust us’, that this is the ‘highest and best’ use solution, why do the proponents not present a comparative financial analysis for say an office, residential and mixed use precincts? Why has the Vision City Council not done its own assessment and made it “openly and transparently” available to the ‘uninformed public’? Somebody isn’t being upfront in all this.

    These buildings would have returns on investment, pay taxes and create jobs. In fact just looking at the jobs, at say 1,000,000 sf of office space at +/-200 sf/employee = 5,000 jobs (I don’t have the figures in front of me, but adjust to actual from the above).

    I don’t think there’s going to be a big difference, but I’d like to see that someone in this whole shenanigan has done their homework and is willing to share their unedited facts and figures to the unwashed.

    The last time the citizens of Vancouver ‘trusted’ those promoting a sure thing we got the OV and a probable $150M loss / tax increase.

  • Max

    @ Bill # 13

    In response to your first point:

    I worked for the National Post when it first lauched out. The powers in charge placed parameters on which type of advertisers they would accept, to the point those powers would not take flyer sales, such as Eatons White Sale. Those power in charge thought that type of advertising was below the standards they had set.

    After a very few short years, and millions in lost revenue, those same people in charge were begging to have those no-go companies advertise and spend money with them.

    To link a casino and body rub parlor together is just reaching, and….sad.

    We have a muliticultural society, 46% of our population does not speak Enlgish as a first language.

    I understand from other MSM artilces I have read that those opposing the casino are predomiantely, white.

  • Walrus

    If you beleive the spin coming out of the pavco bclc gaming den it’s gonna be all right … just relax people. money laundering is nooo problem, gaming addicition is nooo problem, broken families, it’s all no problem. the only problem for these guys is who they’re going to pimp off of next after this thing gets the boot and they get handed their walking papers. they’re addicts too … to being swilling off tax payers backs. good riddance!

  • Bill McCreery

    @ Max 14.

    Perhaps it may be reaching. However, I base this suggested possibility on what I’ve seen elsewhere with respect to some casino clientele and what I’ve heard about places I haven’t been to like Vegas and Reno.

    I’m sorry if you mistook my ‘body-rub parlour’ reference as having anything to do with the colour of one’s skin. I did not. With respect to “…then back on the plane” I was referring obviously to people from places other than our local “muliticultural society”. In my experience such people come from the 4 corners of the globe.

    I don’t know enough about newspaper advertising to be able to determine whether your comparison is a valid one. Assuming you are comparing your example to your implied, if I understand what you’re getting to, suggestion that it is not a good idea to set “standards” for the kinds of tourists we want, from that perspective then, we differ.

    The reason, as I’ve said before, that Reno and Vegas have become gambling meccas is because there is little else in those places that the good Lord gave them to create wealth. IMO Vancouver has a whole lot more going for it than Vegas.

  • The Fourth Horseman

    @ Max.

    There is lots of concern in the Chinese community about this issue.

    You might want to tune into Fairchild radio one day and listen to the phone-ins. In Cantonese.

    Unless, of course…you’re white.

  • tf

    It’s unacceptable that Rich Coleman is both the Solicitor General who regulates gambling and is also the minister responsible for the BC Lottery Corporation that benefits from and promotes gambling. How can the government find that acceptable?
    There are many similes we can choose from – let’s start with – “it’s like assigning the fox to guard the chicken house” and the public loses the eggs…

  • Morven

    All around the Pacific Rim, casino regulators keep a close watch on the operation of the VIP rooms, which are akin to a casino within a casino.

    As I understand the statistics, something like 50-60% of casino revenues come from the VIP rooms, with a very small number of actual gamblers. The casinos pay commissions to the junket and VIP room operators to bring gamblers into the casino

    The reason that regulators watch these rooms is that the VIP room operators are occasionally persons that otherwise might attract regulatory attention but drop of the radar screen as the casinos just have contracts with VIP operators not regulatory oversight.

    Also, given the global nature of gambling and PAVCO’s earlier pronouncements, it is highly likely that we will also have the VIP room issue loom large in Vancouver.

    Perhaps the medley of casino regulators and boosters in BC can tell us how they will regulate the VIP room issue and not bury it as a compliance footnote.

    Transparency please.
    -30-

  • Max

    @ The Fourth Horseman #17

    Thank you, I will.

    And, yes, I am ‘white’ and admit my Cantonese is somewhat rudimentary (as is my Russian) but I’m sure I will get the general gist of it.

  • Max

    @ Bill #16

    The point that I was tyring to make is sometimes, you do need to be careful of what you wish for.

    When the NP first launched out, Radler and gang wanted to keep it upscale and primarily an editorial product. No more than 33% advertising.
    Guidelines were put into place as to what type of advertising they would accept, which meant, many of the loyal Financial Post advertiers were no longer deemed worthy.
    Well a year plus in and the NP is bleeding money, they changed their minds and had to go hat in hand to make deals with the old advertisers in order to woo them back. At that time, Eatons White Sales and Staples were two of the casualties.

    As for Vegas, it is worth the trip. Take a heli trip over the Hoover Dam. Friends and I head there at least once a year. Like they say it is the adult version of Disneyland.

  • evilfred

    This reminds me of a Simpsons episode:

    monorail… monoraillll… MONORAILLLL

  • Walrus

    Looks like Premier Clark has started to clean out the barn of Gordo hacks, lackeys and stiffs. Could a purge at bclc and pavco be coming?